A round up of the sector's biggest news

10 June 2022

Let’s take a look at what’s been gaining traction in the Construction & Built Environment sector over the past few months.

building on sustainability & Making improvements in the construction industry

There’s no doubting the fact that people now have a greater understanding of sustainability and what it means to be a ‘sustainable business’. Whilst the understanding’s there, there are clear barriers to improving the number of projects achieving lower carbon outcomes. A key element to overcoming these will be goal setting, which some might say has to be more prevalent throughout all areas of construction. Equally, improving levels of communication between designers, contractors and suppliers will go a long way to improving sustainability success rates, as well as clarifying responsibility at the very start of a project.

If sustainability is integrated into the early stages of a build, outcomes can be factored in without significant financial impact. Together, the sector needs to be doing all it possibly can to lower emissions… our planet’s counting on it.

Source: Construction Buzz

CITB to dig into reserves to boost investment in skills

With the goal of ramping up investment in construction skills, the Construction Industry Training Board (CITB) has announced it’ll be digging into tens of millions of pounds deeper into its cash reserves over the next three years. This represents a major increase from the £15.2m allocated from reserves in the previous plan to cover the same period.

£466.8m has been allocated for direct employer funding, including more than £200m over the next three years in apprenticeship grants. This is part of the CITB’s pledge to inspire people outside of the industry to choose construction, as well as upskilling and retaining existing talent.

Source: Construction News

Construction costs soar

A report by Arcadis found that soaring energy costs have driven double-digit cost inflation for construction projects worldwide.

And the global city sitting at the very top of the ‘Most Expensive City to Build’ list? London – again. Followed closely by Geneva and Oslo. At the other end of the scale, Birmingham is considered the cheapest city in mainland Great Britain to develop.

So where’s the inflationary pressure coming from? The increase in commodity prices. Copper rose 70% from its pre-pandemic price, aluminum rose 40%, and iron more than doubled in price.

major developers yet to agree to remediation levy

Over a dozen major developers and housebuilders with a combined turnover of £2bn are yet to sign up to the government’s new building-safety remediation measures, which is currently voluntary.

The levy, which was announced in April 2022, aims to raise £3bn over the next 10 years.

On the plans, the Home Builders Federation said:

“We fully support the principle that leaseholders should not pay to remediate their buildings. UK housebuilders have already committed to remediate all their own buildings, plus £3bn (through RPDT [Residential Property Developer Tax]) to pay for those built by foreign builders, local authorities and other parties.

“Any further levy is not proportionate and poses a serious threat to businesses, jobs, investment in new sites, housing supply and affordable housing provision. Government must act to make other responsible parties pay their share and not take the easy option of targeting UK builders again for a problem they did not create.

“Saying ‘it’s too hard’ to get contributions from other parties is unacceptable and is an affront to UK businesses who employ hundreds of thousands and pay billions in UK taxes.”

Construction project starts down by a quarter

A survey released at the start of May revealed project starts declined by 24 per cent in the first quarter of 2022, compared with the same time a year ago. This year-on-year drop has been attributed to the ongoing material and energy cost crisis, as well as the impact of the Ukraine war.

The construction sector’s seeing somewhat of a subdued recovery but commercial and civil engineering work have proven to be the most resilient segments, supported by COVID-19 recovery spending and major infrastructure projects respectively.

how will the building safety bill affect the construction sector?

The Government’s new Building Safety Bill passed through the final stages of review in the House of Lords, and with Royal Assent received, on 28th April 2022, the regulations became law.

It’s hoped this major piece of legislation (262 pages long, in fact) will provide the clear guidance the industry desperately needs.

The new act will also provide residents with the ability to hold developers and builders to account if fire safety is threatened. A Building Safety Regulator will therefore be responsible for ensuring risks in both new and existing buildings measuring more than 18m are resolved.

The three core objectives of the Building Safety Bill are:

  1. To implement a new, stricter regulatory regime for high-risk buildings.
  2. To oversee the safety and performance of all buildings.
  3. To assist and encourage competence within the built environment industry.

Steel and timber prices ratchet up as Ukraine war takes hold

We’ve seen material prices skyrocketing once again after months of gradual decrease, following Russia’s invasion of Ukraine. According to the Department for Business, Energy & Industrial Strategy, timber and steel were two of the hardest hit materials, with both seeing a significant increase in March.

diversity and inclusion takes centre stage through ‘mou’

Key membership bodies have signed a ‘Memorandum of Understanding’ (MoU), driving forward the creation of a more diverse and inclusive sector. The Chartered Institute of Building (CIOB) says they’ll be supporting initiatives which break down barriers and reduce the impact of bias and that by working together, the industry has the potential to drive positive culture change, not just for the sector, but for our communities and society too.

The MoU brings together six organisations to represent around 35,000 members:

  • The Chartered Institute of Building (CIOB)
  • Institution of Civil Engineers (ICE)
  • Landscape Institute (LI)
  • Royal Institute of British Architects (RIBA)
  • Royal Institution of Chartered Surveyors (RICS)
  • Royal Town Planning Institute (RTPI)

Clc takes action to ease impact of construction inflation

With the Ukraine crisis compounding existing challenges of materials’ supply and prices (caused by the after-effects of Covid, escalating global demand, and supply chain disruptions), the Construction Leadership Council’s (CLC) set out plans to mitigate the impacts of steep inflation. Bringing together industry experts, the CLC’s plan includes:

  • Developing market intelligence about risk hotspots
  • Publishing guidance on price inflation indexation and commercial issues
  • Preparing case studies on good practice in response to current inflation
  • Running industry briefings on conflict avoidance
  • Researching long-term capacity loss from Ukraine, Russia and Belarus, and impacts on the sector.

CLC member and Mace Group Chairman and Chief Executive Mark Reynolds said: “Across our industry we are seeing businesses facing real challenges with inflation that are well above those seen in the sector for many years. There is no one party that can tackle this issue alone and we can’t pass the problem on to others to solve. We all must work collaboratively – clients, contractors and everyone in our supply chain – to provide support where possible to limit the impact on firms nationwide.”

riba: April’s Future Trends survey

The Future Trends survey from Royal Institute of British Architects (RIBA), which monitors the employment and business trends affecting the architectural profession, was published in April and revealed that whilst still in positive territory, architects’ predictions for future work are becoming less optimistic as the broader economy weakens.

Twenty-three per cent of practices expect workloads to increase in the coming three months, whilst fifty-nine per cent expect them to remain the same. Eighteen per cent of practices expect workloads to decrease.

For the full survey findings, click here.

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